How Whole Foods Became The Luxury Brand Of Millennials

America’s definition of luxury is changing. Quiet, exclusive, and socially pedigreed extravagance is giving way to a new generation of affluent consumers (read: Millennials) who have grown up with a new definition of luxury that will forever change the way we market upscale goods.

As the founder of Pavone, an integrated ad agency that specializes in food and beverage marketing, I’ve had the chance to observe these changes up close and personally. The trend is especially relevant to me because it seems to have become most distinctive in the food and beverage industries. As a Baby Boomer, luxury is about designer labels and rarefied retail temples like Neiman Marcus. These outlets are full of lithe, headless mannequins, invisible cash registers, and generically attractive retail associates who all adopt the same quiet and impossibly dignified manner.

Whole Foods’ retail model has turned this blueprint on its head by reinventing the way well-heeled consumers think about upscale goods. They’ve taken the old cues for austerity, economy, and frugality and applied them in new ways to spread their message of eco-friendly capitalism to the world (or at least to some of the better zip codes in America).

Instead of cold, intimidating retail vaults awash in tastefully, restrained colors, Whole Foods provides a hip, eclectic sort of vibe that feels like a Berkeley revival with no credit limit. Funky music blares, dreadlocked associates staff checkout aisles and shoppers are a mix of artsy-looking moms, retirees in pricey but well-cushioned running shoes, and a constant stream of suits taking a quick break from corporate America while awaiting a $15 turkey sub and some curried sweet potato couscous.

The rise of Whole Foods is important because it is emblematic of a larger shift in affluent marketing. Here’s how:

Provenance: Premium pricing is rationalized in part by ensuring consumers’ awareness that real people are touching (or "curating") the things they buy. Next to those beautiful $10 containers of fruit in the produce department, Whole Foods posts signs announcing that these goods are not only natural or organic, but were cut up by hand by real people named Miranda, Steve, or Bethina. To drive this personal touch home, Whole Foods features store employees’ names and sketches throughout the store on well-placed chalkboards.

Inclusion: Despite Whole Foods’ locations in pricey neighborhoods, its personnel is diverse. Each location I’ve visited seems to feature a dynamic employee mix of various ages, genders, ethnicities, and funkiness.

Egalitarian: Whole Foods’ employees seem to be united in their casual willingness to greet you (but not in a perfunctory way), to talk to you and with you (but not bog you down with chitchat), and to smile at you as you walk by. It’s as if they really like you. Like they’re happy to be there. Like you’re one of them.

Informational: Whole Foods can’t stop talking about where they got the food they sell, how it was made, who made it, where it’s going, or what’s going to happen to it when you throw out the leftovers. This kind of information is on the pack, on electronic displays, on chalkboards throughout the store, in brochures around the store, on websites, and in press releases. They give new meaning to the word "transparent."

Authenticity: Whole Foods’ consumers want a reason to believe, and they love a credible, authentic voice that delivers on its promise.

Whole Foods has been able to create value (which justifies high prices) not just by providing hard-to-find organic or all-natural products and labels. They’ve also created a high-touch, overtly humanized experience that is designed to make you, the shopper, feel smarter, healthier, cooler, and wealthier than you do in any other food shopping experience.

Yes, in a world filled with slick iPhones, sleek cars, and perfectly constructed dress pants, locally grown, small-batch food touched by human hands has become the new luxury. Whole Foods tapped into this need, and has attracted formerly closeted affluents into its aisles, piled high with cheese wheels and homemade marshmallows, to explore new, previously unknown ways to spend their disposable income.

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Curious that "locally-sourced," "sustainable," "egalitarian," and "natural" are all defined here as "luxury." Are we equating sustainability with excess?

I suppose the argument is that -- as children & grandchildren of the generation that built the food industrial complex -- we millenials, upon viewing any product approaching an approximation of the real cost of food, would deem it luxurious & expensive.

While I think you raise some interesting comparisons around perceptions of luxury and how it's evolving, I don't agree that this is a Boomer versus Millennial issue. Boomers are just as interested in more experience-based, human ways of expressing luxury. It's the "I learned how to make wine in Tuscany last fall from the vineyard owner," mentality that is just as pervasive as the millennial's desire for authenticity -- often because their Boomer parents made travel part of their upbringing, exposing them to different foods, cultures, etc that fuel their interests. Also, if you breakdown the demographics of WFM, Millennials represent a very small portion of shoppers (about 6% in 2010). Living in Boulder, I do see a number of students from CU regularly at WFM, however, they're often in tow with their parents, or at least carrying their credit cards. It's still their parents' market, at least until they get married, have a kid and fill their carts with organic dairy and produce.

Another difference is that while shopping at a high end retailer does nothing more than make the wealthy and often pretentious buyer feel good about themselves, shopping at WF is a social good-the customers will become healthier and happier, and may be encouraged to take on larger lifestyle changes, and sustainable, healthy, and organic food production is encouraged.

Another difference is that WF is the only retail store I know of where the staff knows more about the product they are selling than I do. I recently bought a couscous dish, and was given an informed, unscripted explanation of the two major types of couscous, what it is, and what it is best used for in the kitchen. Now that may also happen at Neiman Marcus, but it never happens at Best Buy or *anywhere* else I shop.

The “Informational”angle you play up is linked to how Whole Foods truly defines “luxury.” It’s acase of high value being about high values (organic, local, slow, fair,sustainable, etc...). My past experience as a national marketer director withWhole Foods Market gave me a front row seat to learn that its customers were/area mix of over-educated & affluent people as well over-educated &under-employed people. The affluent aren’t price sensitive. The under-employedwill trade up to spend for something that syncs with their values. For the affluent,Whole Foods is like driving a Mercedes because they can afford it. For the under-employed,Whole Foods is like driving a Subaru because it’s more down-to-earth real.Appealing to both the wealthy and the under-employed is a rare place for aretailer to find success.

My first experiences at Whole Foods weren't in the typical stores. But the atypical one in Berkeley. Where you found hippies, students, vegans, yoga moms, soccer moms, affluent people and pretty much everyone at the store. The parking lot had everything from bicyclists, to people walking from the bus stop, to beamers and beaters. I didn't realize it was an upscale store until I went to the one in Los Gatos and saw a different crowd. I think Whole Foods has done a great job of making the stores match the community. Pay a visit to the store in Oakland, and you'll see a huge mix of people and incomes.

Great post Michael...beautifully contrasts the new luxury with the dominant one. In my work on eco-friendly enclaves in India, we found a very similar contrast where the green buyer was looking for large homes like the non-green one but the motivations were more about discovering oneself vis a vis home as a trophy to show the world one's station in life. Despite having the purchasing power, this consumer is inherently uncomfortable with the idea of moving away from what they call' middle class values'. 'We want our children to grow up like normal children' is a constant refrain...Wonderfully captured by you this contrast in an American context.

Excellent glimpse of how Whole Foods designs their marketing to be a provider of attainable luxury. In an MBA course, we recently discussed the importance of sustainability in marketing efforts, and clearly Whole Foods has really nailed it. I do feel inundated at times when shopping there—and certainly don't consider their store to be an everyday grocer—but you're correct in that they do everything they can to make customers feel special.

I'm not so sure you should be impressed by the 'diversity of the employees' and consider that inclusion. I used to be an STL for WFM, in 2 regions and in 3 states... for the majority of the time, the only employees we could hire for entry-level retail could not afford to live in the ZIP code the store was in... in fact, more than 75% of my employees at one store in Suburban Detroit traveled more than 20 miles (out of urban wastelands of minimum wage) to work in entry-level jobs..

So, while you see them there, and they are happy (because it is a better and more humane job than what else was offered) they don't choose to work there for the inclusion, and WFM didn't include them for their diversity, but rather for their economics.

True, while there is a consciousness to being a WFM team member, the simple fact is that it is a blue-collar sales job that offers above average benefits in an otherwise crowded labor pool. In the end, it's the all-mighty dollar that brings us together.